Last weekend, we published an article advising Faraday Future’s backer, Chinese billionaire Jia Yueting, to bail out the company ahead of its production-intent electric vehicle unveiling in a few weeks.
It was prompted by several recent lawsuits from suppliers claiming that they haven’t been paid in months and insider information suggesting that the startup is in debt to the tune of hundreds of millions. We have contact with one such organization ourselves that says they’ve stopped working with Faraday because of lack of payment. We’re not worried they will find out who because many of their suppliers are in the same boat. The company refused to comment on any these reports, but yesterday they went on a Twitter rant dismissing the financial issues as “skepticism and negativity.”
Our piece on the issue wasn’t actually negative, despite the apparent serious financial situation at Faraday Future. We understand the difficulty that startups have in a capital-extensive industry, like building automobiles.
We highlighted the fact that Yueting secured $600 million in financing, but the money clearly hasn’t made its way to Faraday yet and waiting for the unveiling at CES next month is not a great idea:
Tesla used its unveiling events to drum up demand and take reservations with deposits. In turn, it was able to go back to suppliers and secure contracts to bring those cars to production, but Faraday Future can not expect people to place reservations for their vehicles if the company is $300 million in debt and being sued by suppliers left and right.
Yueting should refinance Faraday Future right now, if he really can, and let the company sort out its debt before going into the unveiling at CES next month. Otherwise, even if the vehicle is a technological marvel, it will be dead on arrival.
But the company didn’t take kindly to our comments, which they described as “skepticism and negativity:”
Dismissing important reporting on the company’s precarious financial situation as “media pessimism” is something special.
They also used screenshots of the headlines instead of linking to the articles. That way their followers don’t read the explanations behind those headlines.
After two or three more of these tweets, which is more commenting than the company has done on any of the multiple reports on their financial situation, FF went right back to teasing its upcoming electric car:
Faraday Future plans to unveil its vehicle on January 3rd at CES 2017. We’ll be there to see it…hopefully.
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